“The Debt of the Dictators” is a product of INSIGHT, a Norwegian production company. This documentary is aimed at examining the current debt burden of developing countries. Journalist Erling Borgen directs the INSIGHT team, and the 46 minute DVD examines the situation in Argentina, South Africa, and the Philippines, with a brief reference to the DR Congo.

The documentary focuses on the issue of what it calls illegitimate debt. These are debts undertaken by dictatorial regimes, but there is some difficulty in defining what makes debt “illegitimate.” A report from the Norwegian Church Aid group, which sponsored the video, states that the term illegitimate debt “has no existing definition in law, and the term seems never to have been used in legislation or court judgements.”

So, in some sense, the video is a defense and exploration of what this “illegitimate debt” is. The movie begins with a statement from Alvin Anthony, leader of Jubilee South Africa, a debt relief movement. Anthony says that illegitimate debt is the barrier to the eradication of poverty, and that with debt forgiveness, “We’ve got a better chance for world peace.” But, again, we are left looking for a real definition.
The first country explored is Argentina, and we see here the familiar pattern that will emerge throughout the rest of the video. Argentina’s predicament has the two factors contributing to “illegitimate debt”: corrupt political rule and massive foreign debt. The figures that are most often used to show the size of the debt load in these countries is a comparison of government spending on social programs compared to debt interest. In Argentina, the government spends three times as much on servicing debt interest as on health, education, and welfare programs.

After a brief background on Argentina’s situation, referencing the military dicatorship, the attention turns to the transnational banks that loaned money to the corrupt government. The banks are variously called “accomplices” in “genocide,” and “hypocrites.” One prominent Argentinian economist says that the banks “have no ethics. They have no morals.”

Here is the common refrain throughout the remainder of the video. The corruption of the dictators’ regimes are given passing lip-service, while the lion’s share of blame is placed on transnational banks and multinational corporations that did business with these regimes. Since the governments were not democratically elected and were harshly oppressive, the reasoning goes, the nation now should not be responsible for the debts incurred.

In South Africa’s case, we are told that the “apartheid debt” loaned by the bankers makes them complicit with the “genocide.” South Africa’s current democratically elected government insists on paying down the debt, despite the protests of groups like Jubilee South Africa. But here, as elsewhere, the atrocities committed under apartheid are emphasized mainly in connection with foreign banks and companies.

In the Philippines, one third of the budget since 1986 has been spent on foreign debt payments. The debt was racked up under the kleptocracy of the infamous Ferdinand Marcos. Because of their willingness to deal with such dictators, economist Hero Vashwani says, “Bankers have no morality. They are like lawyers…, bankers are the worst prostitutes on earth.” Such a description might instead better fit Marcos or his wife Imelda. Whatever guilt of corporations and banks that exists is that of association with the origin of such evil itself.

Such is the general thrust of the video. The complex causes of poverty in these developing nations are simplified into a single villain: transnational banks. The evil of the various dictators is highlighted only in relationship to the loans they were able to garner from the IMF, World Bank, and other financial institutions.

The vigor of the DVD’s depiction of the problems is precisely its greatest weakness. The simplistic depiction of the problem (international debt) and the proposed solution (debt relief) displays an underlying naïvete and hostility toward free economies.

The question the film raises, “whether it is fair that innocent poor people in the world today should pay the debt of their dictators in the past,” is an important and a legitimate one. But this does not obviate the greater guilt of the actual perpetrators of brutality and oppression: the dictators themselves.

The assumption is that international engagement, trade, and investment allowed these regimes to last longer than they otherwise would have. They presumably would have collapsed far sooner if they had been isolated. But this assumption is highly speculative. It is hard to imagine more isolated regimes than North Korea under Kim Jong Il or Castro’s Cuba, but brutal rule has lingered on and on, while the respective populace ekes out a living under grinding poverty.

And when banks and businesses disengage from such nations, they are accused of not caring for the plight of the poor and oppressed. So often there are simply no perfect solutions.

The core problem is the corruption of the various governments. And the depicted dichotomy between the dictatorial regimes of the past and the democratically elected governments of today does not stand up under closer scrutiny. The video has difficulty explaining the commitment of the elected governments to pay on the foreign debt. It can only assert that in the case of the Philippines that the officials are Marcos loyalists and that in South Africa politicians are afraid of scaring off future foreign investment.

Indeed, contrary to the depiction of this video, the government of South Africa is currently embarking on a program to loan Zimbabwe $1 billion, despite the recent atrocities committed in the “drive out the trash” campaign of president Robert Mugabe. Ironically, the South African government would be in the same position with respect to Zimbabwe as the IMF or World Bank in South Africa!

As Samuel Gregg and Osvaldo Schenone write in the book A Theory of Corruption, “We must recognize that all societies, no matter how sound their moral and institutional cultures, are in some way marked by corrupt activities.” This is true for both democratic governments and despots, transnational banks and multinational corporations.

Responding to the developments out of the G8 meeting in Scotland a few weeks ago, Norwegian Church Aid explicitly opposes restrictions on debt relief that would do nothing but improve the economies of the debtor nations. Atle Sommerfeldt, Secretary General of Norwegian Church Aid, says, “All G8 countries must now follow the example set by the UK and guarantee that no country is forced to liberalise trade or commercialise public services as a condition of debt relief.”

This video presents and indefensibly unbalanced view of the facts of debt burdens and poverty in developing countries, externalizing blame to foreign entities, while minimizing internal causes like governmental corruption and repressive economic systems. The irony should not be lost on the viewer when a poor woman in Argentina speaks from a village named after Che Guevara.

Miscasting the problem in an “us vs. them” framework as in this video does nothing to account for the personal nature of sin and its relationship to structural evil. Gregg and Schenone write, “There is perhaps no greater problem that handicaps the flourishing of developing nations than that of corruption. Though corruption is associated with the original sin that marks the heart of every person, corruption is also a social scourge that debilitates the daily economic and legal transactions upon which all of us ultimately depend for our material survival.”

Debt relief, by itself, simply is not the panacea for poverty in the developing world. It is only a part of the solution. When speaking about debt relief, Kenyan bishop Bernard Njoroge says, “If we don’t address the issue of corruption, it will repeat itself. It is important that that issue is addressed.” He continues, “One of the statements that all of the [borrowing] countries have to show through international lenders is that they have sound economic policies. The debts that have been forgiven were also given on the basis of sound economic policies. Forgiveness does not carry within itself a solution to this problem. We need fair trade.”

“The Debt of the Dictators” simply does not present an adequate or accurate view of the complex and comprehensive nature of debt and poverty in the developing world. It promotes solutions that by themselves would do nothing but permit further abuse.

You can order a copy via e-mail to debt{at}nca.no or call +47 22092700

Here’s a great interview from the Marketplace Morning Report with Chris Farrell, in which he argues for the lifting of trade sanctions against dictatorial and oppressive regimes. He compares the cases of Cuba and China, in which two different strate